Observatory Crest hits back at opposition to F5 deal

Observatory Crest has responded to criticism, by incumbent Firewall Systems, of its appointment as a second Australian distributor for F5 Networks.

F5 chief operating officerJohn Rodriguez told Australian Reseller News that a small amount of overlap between the two distributors was expected, but that Observatory Crest's niche focus would provide "healthy competition in the market".

However, Firewall Systems marketing director Nick Verykios told ARN he questioned Observatory Crest’s place in the Australian market, as he believes the appointment creates unhealthy competition.

“All that it has done is to create price competition with our accounts,” Verykios told ARN. “Non-productive competition like this means there’s less money to be made by everyone and stifles growth.

We’ve had to work hard to do things two or three times, where before we would need to do it once – it has affected our productivity with F5.”

“I don’t know how you can have unhealthy competition. Moving from a monopoly to a duopoly is always going to cause a problem for the person who had sole or exclusive distribution up to that point, because by definition they are going to lose market share.”

Christmas says Australian market customers will see having two distributors as healthy competition.

“Firewall Systems have been in the New Zealand market for a year or two and frankly, they have been unable to secure a competitive place in that market with regard to F5,” he claims.

Christmas also believes the two distributors have yet to find a happy balance in New Zealand, while he hopes the Australian situation will settle down soon.

He says vendors make distributor appointments because they are trying to do the right thing for their customers and partners. “People who are affected by that [decision] don’t always agree with it, but it has been done for legitimate reasons and I don’t see this [deal] as being any different.”

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